Maybe we do not know know or even disdain business principles of the rich like the Chinese or Jews. But they are so rich. In US there may be just 2% of total US population but control 30% of the wealth At Israel, these rich fund the wars vs their neighbors.
They must be doing a lot of great things that MBA and Ivy Leagues do not know or not teaching (When I was teaching MBA, this post asked students to make report on Business and the Bible, Money is mentioned 300+ times in the Bible. Surely God wants us all to succeed.
Here are 7 principles mentioned by the author:
1. Guard your reputation
Your networth is your reputation.
Your reputation is the funnel where cash flow comes in
Employ honest weight and measurement. Be honest and truthful
Be like the Chinese and the Jews who seal the deal with handshake
Their words are the hardrock foundation of any deal
Find in your business gaps where you are not keeping your word and correct this ASAP
2. Do not muzzle your ox
Share your earnings, your wealth with those contribute to your wealth building. Chinese and
Jews practice this.
We practiced this through incentives and profit sharing. But succeeding generations are not
practice these.
Give equity to your top performing people and you will be amazed at how hard they will work
Sense of ownership does wonder. Smart modern companies call this stock options.
Whether its stock options or profit sharing, its the same.
Salaries only muzzle the ox; equity profit sharing does not
3. Let your offsprings inherit skils rather than money
Teach your offspring skills that either employable or those that build wealth Let them
be familiar with cash flow, negotiation, budget, cost reduction, operations, marketing and the like
Stop preparing them on how to inherity money. Money gets lost or spent but skills persist. That
is why jewish families continue to persist despite wars, famine, holocaust. Skills not money get
passed from generation to generation
4. Diversify: divide your wealth into 3 parts:
1/3 land - plade of abode, rental properties
1/3 main business - main commercial business producing income of the family
1/3 liquidity assets in banks: cash, bonds stocks
You do not put all your eggs in one basket. If you put all your eggs in one basket, there is a
catastrophic failure if that one investment fails.
This is another way of saying maintain various streams of income in your portfolio
5. Pay your employees and suppliers on time
Its not only right and just, it is Biblically correct. Pay your employees salaries before the sun goes
down so with your suppliers.
Paying your employees on time builds trust. Trust builds loyalty. Loyalty means better and productive work
Suppliers paid on time builds reputation. Remember Number 1 - Reputation is your networth. It
is the vessel through which cash flow comes in.
6. Be like Joseph the dreamer in Egypt - save 20% of your earnings during time of plenty
Matsuhita of Panasonic calls this dam management. But Joseph who was assigned as the one
who will manage the dream he foretold about Egypt: 7 years of prosperity and 7 years of famine
saved and warehoused 20% of the wealth annually to prepare them for periods of famine
They not only survived the famine but dominated the region.
See how the billionaires now are sitting on billions of cash as war chest to go on bargain
hunting comes next crash/recession
7. Guard the Sabbath
Its not entirely religious. But this forces you build a business that exists even without you for
1/7th of the time or 52 days, or even more through:
1. delegation
2. documented processes
3. systems (especially reporting and control)
security
accounting
tracking
It is challenging and takes a lot of work to doy this
This post is simply amazed how all of these have been internalized without reading the texts of
the Holy Scriptures. However, we fail in Numbers 1 and Number 5. The succeeding generation
have to be taught and they have excuses such as clingy child and so on. But that means I have failed
in Number 2. But these can be remedied at the moment
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